India’s National Pension System (NPS) is a successful retirement scheme. It has given an attractive return of more than 13% in equity and 9% in date. It is a universal retirement tool available for low cost, flexible and all citizens.
New Delhi: India’s National Pension System (NPS) has emerged as a great performance and affordable retirement planning tool. Its equity schemes have given an average annual return of more than 13 percent since the beginning. This was stated by Finance Minister Nirmala Sitharaman while addressing the NPS Day Conference on ‘Inclusive Pension, Innovative Solutions: Strengthening Retirement Security in India’ organized by Pension Fund Regulatory and Development Authority (PFRDA) in New Delhi.
Other investment options under NPS have also given great returns in a long time: both corporate date and government securities have received a return of about 9 percent annually, which has made NPS one of the world’s most attractive pension products. Sitharaman said, “Schemes under NPS have given attractive returns. Average annual return from the initial scheme under the equity scheme has been more than 13 percent, and about 9 percent of both corporate debt and government securities.”
NPS gave great gift in retirement planning
The minister emphasized that it makes NPS an important basis of retirement security not only for government employees, not only for government employees, but also with fantastic returns, low cost of system, portability and flexibility. The NPS launched by the then NDA government in 2004, a certain-profit (DB) model had a significant change in a fixed-yoga (DC) structure, making pension planning more durable. The one which started as an improvement for government employees has now become a universal retirement tool, which is available to all citizens including private sector and self -employment. Sitharaman further said, “NPS has changed retirement planning from government sector privileges to a universal tool for financial security.”
With just Rs 1,000, you can keep NPS account active
NPS is one of the lowest cost pension fund management schemes worldwide. Low fees make sure that more money from subscribers should be invested and growing over time. In addition, its composition is designed for regulated, transparent and easy mobility. The Finance Minister said, “Whether you change jobs, change space, or go to self -employment, the pension account remains the same.” “NPS gives flexibility and option.” A subscriber can keep your NPS account active with a minimum annual contribution of just Rs 1,000, and it is not necessary to contribute every month. This flexibility is also very beneficial for informal and working in Gig Economy.
In 2024, the NPS platform was upgraded to improve the Direct Remittance Facility, allowing subscribers to provide the same day’s net asset value (NAV) for their contribution. This prevents the loss of potential market gains caused by delay in processing – which is very important especially in changing markets. Sitharaman said, “It eliminates the risk of missing a possible profit due to delay in processing in the growing market.”
As India is aiming to become a developed nation by 2047, a safe, pensioner society is considered necessary. NPS helps reduce financial pressure on younger generations and ensure respectable old age for senior citizens. The Finance Minister said, “As India is moving forward with objective towards developed India @ 2047, every citizen can imagine financial respect in old age.” He further said that pension gives a sense of security in old age. They strengthen families, reduce pressure on working children, and put long -term savings in national priorities.